Revised GST rates on building, real estate, construction material (2022) (2023)

The Goods and Services Tax (GST) was introduced to simplify the tax regime, which subsumed all the taxes into one and simplified the system. However, the developer community still grapples with the calculation of GST on construction raw materials since all the input materials fall under different GST slabs, making the process complicated.

What is GST?

India is one of the fastest-growing economies of the world, and it cannot afford to have a complex tax system. Before the introduction of the Goods and Services Tax (GST) regime, there were numerous taxes, such as excise duty, services tax, customs duty, surcharges, State-level Value Added T (VAT) and Octroi, among others, that were levied on the supply of goods and services.

Here is an account of the GST rates levied on construction materials -

What are the GST rates on construction materials?

Different construction materials have been segregated under different tax slabs and attract taxes ranging from five percent to 28 percent.

What is the GST rate on sand?

Natural sand of all kind, whether coloured or non-coloured (other than metal bearing sand) fall under chapter 26 of the HSN code. GST rate on sand is fixed at five percent. Further, bituminous or oil shale and tar sands, bitumen and asphalt, natural asphaltites and asphaltic rocks attract a GST of 18 percent.

(Video) GST Rates on Works Contract w.e.f 18th July, 2022 | GST on Construction Services | 47th GST Council

What is the GST rate levied on bricks?

  • GST rate for bricks varies between five percent and 28 percent. Building bricks and other bricks of fossil meals and other siliceous earth attract a GST of five percent, while multicellular foam glass in blocks or panels attracts a GST of 28 percent.
  • Fly ash bricks attract five percent GST.
  • Articles made of cement, artificial stone or concrete (reinforced or not), flagstone, building blocks, cemented bricks, including prefabricated components for building construction, attract a GST of 28 percent.
  • Glass based paving blocks, including squares, tiles, slabs, objects of pressed glass (wired or not) used in the construction process, glass cubes and small glasswares for decorative purposes, including leaded lights, foam glass used in blocks, plates, panels or objects of a similar kind attract a tax of 28 percent.

What is the GST on crushed stones, gravels and marbles?

The GST rate levied on pebbles, gravels and crushed stones used in concrete is five percent. The following categories are included

  • Articles like limestone, limestone flux and other calcareous substances used in cement manufacturing
  • Materials like gravels, broken or crushed stones, pebbles used for concrete aggregates, railways, ballast, road metalling, shingle and flint (heat-treated or not), macadam of slag, dross or identical industrial waste, tarred macadam, powder of stones and cheeping granules

Marble and granite stones

Marble and granite blocks have a standard GST rate of 12 percent. On the other hand, marble and granite other than blocks attract a GST of 28 percent.

GST on building stones

GST on building stones like basalt, sandstone, porphyry and other sandstones and building stones attract a GST of five percent.

GST on cement

All types of super sulphate, slag, aluminous and Portland cement - whether coloured or clinkered - attract a standard GST rate of 28 percent. However, refractory cement, mortars, concrete, will attract 18 percent tax whereas cement bonded particle board will attract 12 percent GST.

GST on iron and steel

All iron and steel products attract a uniform GST rate of 18 percent. It includes rods, wires, blocks and rolls.

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GST rate for tiles

Similar to bricks, tiles, too, attract a GST between five percent and 28 percent.

They are classified as follows-

  • Tiles (earthen or roofing) attract a GST of five percent. Glazed ceramic flags, paving, or wall tiles attract 28 percent GST.
  • Plastic floor covering (self-adhesive or not), in rolls or tiles form, or plastic wall coverings fall in the GST slab of 28 percent.
  • Flooring tiles of bamboo attract 18 percent GST rate.
  • Articles made of vegetable fiber or straw or of shavings like panels, boards, blocks, tiles, sawdust or other waste, articles of wood reinforced with cement, plaster and similar mineral binder fall under 28 percent GST slab.
  • Plaster, along with compositions based on plaster like sheets, tiles, panels, boards and unornamented articles, is taxed at 28 percent.
  • Tile of artificial stone, cement attracts a GST of 28 percent.
  • Flooring blocks made of ceramic, filler and support tiles, are levied a tax of 28 percent.
  • Pavings and flags made of ceramic, wall tiles, mosaic cubes of ceramic (on a backing or not), including finishing ceramics, are taxed 28 percent.

Also Read:Why should you use Clay Bricks as a construction material?

What are the GST rates on the interior furnishing materials of a building?

Copper Wire

  • For insulated wires and cables, the tax rates are 28 percent. It comes under a chapter related to electrical machinery and equipment, sound recording instruments, TV audio and video recorders and reproducers, and their parts and accessories.

Paint and Varnish

  • Paints and varnishes with enamels, lacquers, including chemically modified natural and synthetic polymers, are taxed at 28 percent GST.
  • In addition to these, resin cement, glazier’s putty, grafting putty and mastics including painter’s filling, surfacing material for facades, floor, ceiling, and indoor walls are taxed at 28 percent.

Bathroom Fittings

  • Bathroom furnishing materials like ceramic sinks, washbasins and their pedestals, bidets, closet pans, urinals and cisterns, and sanitary fixtures of a similar kind are levied GST at 28 percent, except pipe fittings. The GST rate for such fittings is 18 percent
  • Parts of iron and steel used in sanitary ware are taxed at 28 percent.
  • Pipe fittings and tubes including copper, plastic, nickel, aluminium iron or steel attract a GST of 18 percent.

Wallpapers

  • Wallcoverings and wallpapers are taxed at 28 percent.
  • For interior products, the GST rate is between 18 percent and 28 percent. In the case of paintings and other similar items, the GST rate is 28 percent.

Interior Products

  • Locks (combination, key or electrical), including padlocks, are taxed at 18 percent. Articles used for furniture, doors, windows and blinds, including base metal mountings and fittings, are taxed at 28 percent.

GST rates on construction materials

Construction materialGST rate
Sand5%
Bituminous or oil shale and tar sands, bitumen and asphalt, natural asphaltites and asphaltic rocks18%
Building bricks, Fossil bricks5%
Multicellular foam glass28%
Fly-ash bricks5%
Prefab components28%
Glass based paving blocks28%
Pebble, gravel and crushed stone5%
Marble and granite blocks12%
Building stones5%
Cement28%
Iron and steel products18%
Tiles (Earthen, roofing)5%
Wall tiles28%
Bamboo floor tiles18%
Artificial stone, cement, concrete tiles28%
Copper wire28%
Paint and varnish28%
Pipe fittings18%
Ceramic sinks and bathroom fittings28%
Wallpapers28%
Locks18%
Base metal mountings and fittings28%
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What are the GST rates on real estate projects?

Type of projectsGST rate
Affordable housing1% without ITC
Non-affordable housing5% without ITC
Commercial12% with ITC

GST was arevolutionary changein the Indian tax system, which had both flaws and benefits. It has evolved over the years, and yet there are possibilities of improvements. In 2019, GST rates were revised for residential properties, which came into effect from April 2019.

  • At present, the GST rate on under-construction properties is five percent without the benefit of Input Tax Credit (ITC).
  • For affordable houses, i.e. properties priced within Rs 45 lakh, the GST rate is one percent without ITC.
  • The GST rate for commercial properties is 12 percent with ITC benefits.

The government has also revised the definition of affordable housing in this context, which now includes properties with a carpet area not exceeding 60 sq m in metropolitan cities and 90 sq m in the non-metropolitan cities of India.

Recently, the Confederation of Real Estate Developers Association of India (CREDAI) has demanded that Input Tax Credit (ITC) under the GST regime should be allowed to developers. This, as per the CREDAI, would reduce housing prices by almost 10 percent. Presently, the inability of developers to avail the ITC benefit has adversely impacted the construction costs, and thereby the property acquisition cost.

(Video) GST on real estate 2021

GST rate on goods transportation

The transportation of goods carrying construction material where the cost of fuel is included will now attract 12 percent GST. The operators have the flexibility to opt for GST at five percent without input tax credit (ITC) or 12 percent with ITC. The option to switch will be available at the beginning of the financial year.

The GST regime is a landmark in the tax history of India. It has certainly simplified the tax system, but continuous improvisation and a policy of collaborative cooperation is the way ahead.

Also Read:Top five innovative construction materials used around the world

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. 99acres does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.

FAQs

What is GST rate for real estate in India? ›

In March 2019, the GST Council cut the tax rates to 5% from 12% on residential properties and 1% from 8% for the affordable housing segment.

Is GST applicable on bricks? ›

Earlier, a registered person involved in manufacturing & trading of bricks was charged GST at 5% and could claim a credit on inputs. As per Notification No. 02/2022-Integrated Tax (Rate), the GST rate has been increased to 12% with ITC.

What is the latest changes in GST? ›

(1) The 46th GST Council meeting was held on 31st December 2021 in New Delhi. Union FM Nirmala Sitharaman led meeting has decided to defer the GST rate hike to 12% for textiles. (2) CGST Rule 36(4) is amended to remove 5% additional ITC over and above ITC appearing in GSTR-2B.

What is the GST rate on concrete? ›

Cement will attract 28% GST, i.e., a higher rate of tax which means increased costs for the infrastructure sector. Refractory cement, mortars, concretes (mainly used for building industry furnaces, huge ovens etc.) will attract 18% tax.

How do you calculate GST on under construction flat 2022? ›

You are eligible for the new GST rate of 1%, if the developer has not exercised the option to pay tax on construction of apartments at the old rate of 8%.
...
GST rate on flat purchase 2022.
Property typeGST rate till March 2019GST rate from April 2019
Non-affordable housing12% with ITC5% without ITC
1 more row
Aug 2, 2022

What is the GST for house construction? ›

GST rate on construction services and materials. In general, the GST rate on construction services is 18%. However, this rate varies in the construction sector as for affordable housing; it is 1%. Further, the input service and construction materials rate is 18%, while other segments have 5%.

Can we claim GST on building construction? ›

In conclusion, No ITC of GST shall be allowed on construction material irrespective of use of immovable property whether for furtherance of business or not. Therefore, your client cannot take ITC on inputs purchased for construction of building.

How much GST is on floor tiles? ›

Tiles like bricks attract GST rate in the range of 5% to 28%. Roofing and earthen tiles attract 5% GST whereas glazed ceramic flags, paving, hearth or wall tiles attract 28% GST. In the case of bamboo flooring tiles, the GST rate is 18%.

What is rate GST in Brick? ›

Introduction. The Government has notified a revised tax structure for the Brick Kilns sector effective from April 01, 2022. In this new tax structure, the Government has provided the GST rate of 12%[1] (with ITC) or 6%[2] (without ITC) for the below products (hereinafter referred to as 'specified products'): S.

Do you charge GST on materials? ›

If you don't put any mark up on your materials, you will still charge the initial GST you paid and the client will then pay you the GST. As you've registered for GST (voluntarily, as you're under the $75K threshold) you still have an obligation to report and pay GST to us on your BAS.

What is HSN code of construction material? ›

Prepared binders for foundry moulds or cores; chemical products and preparations for the chemical or allied industries, incl.
...
HSN Code 3824.
HS CodeDescriptionGST%
38244090OTHERS ,Products include: Waterproofing Materials, Concrete Admixture, Construction Chemicals, Construction Chemicals18%

How much is GST on RMC? ›

Concrete mix was exempt and RMC was taxable. Prior to GST RMC was taxed at 12.5% GST and VAT varied from state to state. Under GST now both are taxable at 28%.

Is there any changes in GST rates 2022? ›

The new GST rates have been recommended by the finance commission. 26th November 2021: Central Board of Indirect Taxes and Customs (CBIC) department has published the latest notification that 5 per cent goods and services tax (GST) levy on auto-rickshaw services via e-commerce platforms from 1st January 2022.

What is the changes in GST from 2022? ›

Additionally, certain other items such as Curd, Lassi, puffed rice etc., when “pre-packaged and labelled” would attract GST @ 5% with effect from July 18, 2022.
...
Important Changes in GST w.r.t Foods industry w.e.f July 18, 2022.
S. No.Chapter/ HeadingParticulars
65.1001Wheat and meslin, other than pre-packaged and labelled.
66.1002Rye, other than pre-packaged and labelled.
25 more rows
Jul 19, 2022

What are the changes made in GST 2022? ›

1. Provisions enabling charging of interest upto 24% for wrongly availing and utilizing input tax credit has been made applicable retrospectively w.e.f. 01.07. 2022.

Who will pay GST on under-construction flat? ›

Currently, GST is levied on sale of under-construction flats/units wherein the entire value of flat or unit (including value of underlying land) is taxed after giving Ad Hoc deduction of 1/3 of value of flat/unit towards land irrespective of actual value of land.

How is GST calculated on property? ›

Under the GST system, these taxes have been combined into the Goods and Services Tax with a flat rate of 12%, which is applicable only on projects currently under completion. The tax doesn't apply at all on housing projects, affordable or luxury, that have already been completed.

What is the GST rate on residential flats? ›

No GST is levied on rental income as long as residential property is rented out. However, 18% GST is applicable if such property is on rent for business purposes or rent amount per year exceeds Rs. 20 lakhs. 18% GST is applicable on renting commercial properties.

How do I avoid GST on construction property? ›

The proposed new GST rate for under-construction properties will be as follows: It is termed ready-to-move-in property if the builder received the completion certificate before you purchased it. As a result, there is no GST on such assets.

Can GST be charged on residential property? ›

Generally, selling or renting existing residential premises are input-taxed sales and do not include GST. However, if the residential premise is considered 'new', it is a taxable sale and GST is applicable.

Is GST payable on real estate? ›

GST in real estate sales

GST is NOT payable on the sale and purchase of “residential premises”, unless the property being sold is new property. So, the sale of “second-hand” residential real estate (e.g. a home or apartment that someone has lived in) will rarely trigger a GST liability.

Is ITC available on building materials? ›

Clause (c) and (d) of section 17(5) restricts ITC in respect of works Contract services and goods or services used towards construction of immovable property As such, input tax credit (ITC) of GST paid in relation to building or any other civil structure is not available.

Does builder need to pay GST? ›

However, payment made by the buyer to the builder on or after 1st July, 2017 against invoices issued on or after 1st July, 2017 shall attract GST @12%. There is no GST payable on such property even if the construction is completed after 1st July, 2017.

Is GST applicable on completed flats? ›

In the case of under-construction properties, the GST on a flat purchase rate is 12%. GST for flat purchase does not apply to the resale of old properties or the sale of completed homes (where a completion certificate has been granted).

What is HSN code for ceramic tiles? ›

HSN Code 6904
HS CodeDescriptionGST%
690490Ceramic flooring blocks, support or filler tiles and the like (excluding those of siliceous fossil meals or similar siliceous earths, refractory bricks of heading 6902, and flags and pavings, hearth and wall tiles of heading 6907 and 6908, and building bricks)5%
1 more row

What is the GST rate on fly ash bricks? ›

The GST Council at its 47 th meeting had decided that all fly ash bricks attract the same concessional rate, irrespective of the ash content in them. It was clarified that the concessional GST rate is 5%.

What is the HSN code of bricks? ›

HSN Code 6901
HS CodeDescriptionGST%
690100Bricks, blocks, tiles and other ceramic goods of siliceous fossil meals, e.g. kieselguhr, tripolite or diatomite, or of similar siliceous earths ,Products include: Fire Bricks5%
69010010BRICKS5%
1 more row

What is GST rate on sand? ›

Natural sand of all kind, whether coloured or non-coloured (other than metal bearing sand) fall under chapter 26 of the HSN code. GST rate on sand is fixed at five percent.

What are the 3 types of GST? ›

Currently, the types of GST in India are CGST, SGST, and IGST. This simple division helps distinguish between inter-state and intra-state supplies and mitigates indirect taxes. To learn more, read about these three different types of GST.

Is GST applicable on stone? ›

Marble and granite blocks attract a GST rate of 12%. On the other hand, marble, granite and travertine, in other than blocks attract a GST rate of 28%.

Do builders charge GST twice? ›

Hi @GlennP, Not to worry - this is how it always works! Any business registered for GST needs to charge GST on their services, whether its to another business or to a consumer.

What is GST not charged on? ›

Most basic foods, some education courses and some medical, health and care products and services are GST-free, often referred to as exempt from GST. Things that are GST-free include: most basic food. some education courses, course materials and related excursions or field trips.

Can GST be charged twice? ›

GST may be charged twice when the correct information is not included in the customs documents.

What is HSN code for cement? ›

Search HS Code
HSN CodeProduct Description
2523Portland cement, aluminous cement, slag cement, supersulphate cement and similar hydraulic cements, whether or not coloured or in the form of clinkers
252329Other:
25232910Ordinary portland cement dry
5 more rows

What is GST in HSN code 9954? ›

GST Tax Rate: 18%

What is the HSN code 2523? ›

HSN Code 2523: Cement, incl. cement clinkers, whether or not coloured.

Is GST 12% or 18 %? ›

In the 39th meeting of the GST council headed by the Finance Minister Nirmala Sitharaman on March 14, 2020, several major decisions were announced. The biggest among all is the hike of GST on Mobile phones and a few specified parts. It will now attract a GST of 18% which was earlier in the GST tax slab of 12%.

Why is cement GST 28%? ›

Currently, the GST levied on cement is 28%. The high cost of the infrastructure sector can be credited to this high rate of tax. Before the implementation of the GST regime, manufacturers of cement had to pay several rates and excise duties on cement.

What are the 4 slabs of GST? ›

The GST council has fitted over 1300 goods and 500 services under four tax slabs of 5%, 12%, 18% and 28% under GST. This is aside the tax on gold that is kept at 3% and rough precious and semi-precious stones that are placed at a special rate of 0.25% under GST.

Is GST charged on real estate? ›

As a starting point, registrants should be aware that GST is generally payable on the purchase of real property, unless a specific exemption applies. The most common exemption is for most residential properties when they are resold, as GST is payable on new residential property once and resale is usually exempt.

What is the GST rate on residential flats? ›

No GST is levied on rental income as long as residential property is rented out. However, 18% GST is applicable if such property is on rent for business purposes or rent amount per year exceeds Rs. 20 lakhs. 18% GST is applicable on renting commercial properties.

Who will pay GST buyer or seller? ›

GST is paid by the buyers or consumers at the time of purchasing the product or availing of the service.

Is GST charged on property? ›

It flows from the above facts that, sale of ready-to-move-in or completed property does not attract GST. GST is payable only on under construction property as discussed below. No GST is applicable on ready-to-move-in or completed property as per para 5(b) of Schedule II of CGST Act, 2017.

How does GST work in real estate? ›

Under GST, a single tax rate of 12% is applicable on properties under construction while GST is not applicable on completed or ready to sale properties which was the case in previous law. Hence buyers will benefit from reduction of prices under GST.

Is GST payable on the sale of an apartment building? ›

The sale of newly constructed or substantially renovated residential properties is generally subject to GST/HST.

Can you claim GST on residential property? ›

If you purchase residential premises to use in your GST registered business, you can claim the GST included in the purchase price.

How do I avoid GST on construction property? ›

The proposed new GST rate for under-construction properties will be as follows: It is termed ready-to-move-in property if the builder received the completion certificate before you purchased it. As a result, there is no GST on such assets.

How is GST calculated for flats? ›

For flats rated more than Rs 45 lakh, the new GST rate applicable from April 1, 2019, stands at 5%, against 12% currently. The GST Council also reduced GST rates on affordable housing to 1%, from the current 8%. In both cases, the builders will not be eligible to claim an input tax credit in the new structure.

Can we take GST input on building materials? ›

In conclusion, No ITC of GST shall be allowed on construction material irrespective of use of immovable property whether for furtherance of business or not. Therefore, your client cannot take ITC on inputs purchased for construction of building.

Do we need to pay GST to builder? ›

Yes, you need to pay GST to the builder. Since it's a Joint Development Agreement and not a general case, the receipt of completion certificate has no relevance. Capital gains shall be taxable in the year when completion certificate is received.

Can a customer refuse to pay GST? ›

It is ok. There is no problem in it. - The intention of the buyer is clear that he does not want to pay tax. Tell him if you will not pay the amount within six months from the date of invoice then ITC availed by you will get reversed and will be available only when payment will be actually made.

Is GST applicable for completed flats? ›

In the case of under-construction properties, the GST on a flat purchase rate is 12%. GST for flat purchase does not apply to the resale of old properties or the sale of completed homes (where a completion certificate has been granted).

Can builders claim ITC? ›

ITC for the construction of an immovable property cannot be availed, except where the input service is used for further work contract services. For example, XYZ Contractors are constructing an immovable property. They cannot claim any ITC on the works contract.

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